A manufacturer has a monthly fixed cost of $100,000 and a production cost of $10 for each unit produced. The product sells for $22/unit.
The cost function for each unit u is:
C(u) = Variable Cost * Units + Fixed Cost
C(u) = 10u + 100000
The revenue function R(u) is:
R(u) = 22u
We want the break-even point, which is where:
C(u) = R(u)
10u + 100000 = 22u
Typing this equation into our search engine, we get:
u =8333.33
The cost function for each unit u is:
C(u) = Variable Cost * Units + Fixed Cost
C(u) = 10u + 100000
The revenue function R(u) is:
R(u) = 22u
We want the break-even point, which is where:
C(u) = R(u)
10u + 100000 = 22u
Typing this equation into our search engine, we get:
u =8333.33